Leadership (Abuja)

Nigeria: 2014 Budget - FG's Plan to Pay Inventors N47 Billion Sparks Controversy

Despite the reduction in the proportion of capital expenditure in favour of recurrent expenditure in the 2014 budget, execution of real capital projects may suffer yet more setbacks, as LEADERSHIP findings revealed that many provisions in the capital budgets of ministries departments and agencies (MDAs) are allocations for intangible assets.

Analysis of expenditure profiles of 76 MDAs as contained in the 2014 Appropriation Bill presented to the National Assembly for approval, revealed that no less than N47.2billion of these MDAs' capital budgets was allocated to intangible assets, comprising mainly computer software acquisition, monitoring and evaluation, as well as research and development.

Also, despite the provision for budget preparation and monitoring in the allocation to the Budget Office of the Federation to the tune of N70, 792, 232, the MDAs continue to make provision for budget preparation and monitoring.

LEADERSHIP checks showed that over N100m was allocated by government agencies for budget preparation. The Presidency had proposed N6, 925, 234 for budget preparation; Border Communities Development Agency, N1, 890, 090; National Institute of Policy and Strategic Studies (NIPSS), Kuru in Plateau State, N7, 445, 656, while the Aviation Ministry proposed N15, 874, 157 for the same budget preparation.

Even federal colleges proposed hundreds of thousands for the same activity, despite the parent ministry, Education, having proposed N15m for budget preparation and monitoring. This duplication of activity remains one of the reasons for the high budget figures.

An intangible asset, according to search engine Wikipedia, quoting the International Accounting Standards Board, is an identifiable non-monetary asset without physical substance.

Professor Akinola Owosekun of Bowen University, Iwo in Osun State told LEADERSHIP last night that, "Intangible assets could refer to the value of a patent that a ministry or agency or department wishes to acquire."

He, however, wondered what the typical MDA would be doing with such a capital expenditure item and described it as "preposterous."

Bayo Eromusele, an accountant, also agreed with Owosekun and said, "Intangible asset is goodwill, patent and usually very controversial in accounting books."

The 2014 Budget Proposal with a total expenditure of N4.9trillion is already deemed too heavy on recurrent expenditure, as the Presidency allocated N2.43trn - 72.71 per cent of the total figure - for recurrent, while capital projects got N1.1trn, representing 27.29 per cent. This marked a massive decline from the N1.545trn proposed for capital projects in the 2013 budget.

The budget breakdown showed that the Ministry of Education (headquarters) made the highest allocation of N6.9bn to intangible assets, followed by the Ministry of Foreign Affairs (headquarters), N4.75bn. The National Identity Management Commission, N3.84bn; Ministry of Youth Development (headquarters), N2.7bn; Water Resources (headquarters), N2.64bn; Ministry of Transport (headquarters), N2.16bn, and the Office of the Head of Service, N1.42bn.

Other high-end allocations for intangible assets were made by Ministry of Communication Technology (headquarters), N1.32bn; Ministry of Information, N1.31bn; National Agency for Control of Aids, N1.3bn; Bureau of Public Enterprises, N1.11bn; Ministry of Aviation, N1.06bn, and Ministry of Agriculture, N1.02bn.

Previous budgets, as analysed by the Centre for Social Justice (CSJ), a civil society group, also showed massive allocations by MDAs in this regard.

According to the CSJ, the allocations by the MDAs "unnecessarily shoot up the cost of governance - not through recurrent expenditure, but by concentrating spending on administrative capital instead of developmental capital. The demand is over-bloated and represents the trend over the years."

MDAs whose budgets for intangible assets were less than N1bn but more than N500m include the Ministry of Women Affairs, N989.97m; Ministry of Land, Housing and Urban Development, N970m; Office of the Secretary to the Government of the Federation (headquarters), N930m; Ministry of Mines and Steel, N858.46m; Works, N839m; Environment, N810.44m; Police Affairs, N702.83m; the New Partnership for Africa's Development, N702.45m, and the Office of the Auditor General

Others are Nigerian Institute of Transport Technology, N649.3m; National Directorate of Employment, N633.7m; National Bureau of Statistics, N600.3m; National Planning Commission, N511.6m, and Revenue Mobilisation Allocation and Fiscal Commission, N510.3m.

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